Befesa Sa · XETR:BFSA

Befesa Sa — Q3 2016 Earnings Presentation

40 slides from Befesa Sa's earnings presentation, Nov 22, 2016

  1. Slide 1: Third Quarter 2016 Earnings Presentation

    BEFESA BEFESA Third Quarter 2016 Earnings Presentation 22nd November 2016

  2. Slide 2: Forward-looking Statement

    BEFESA Forward-looking Statement This presentation contains forward-looking statements and information relating to Befesa and its affiliates that are based on the beliefs of its management as well as assumptions made and information currently available to Befesa and its affiliates. Such statements r

  3. Slide 3: Introduction

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Rafael Pérez Head of Strategy & Investor Relations 3

  4. Slide 4: Business Highlights

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 4

  5. Slide 5: Befesa 3Q 2016 Highlights

    BEFESA Befesa 3Q 2016 Highlights Consolidated 3Q revenues of €171 million, up 3% YoY. - Steel results improving with LME zinc prices improving to max. levels reached in 2015. - Aluminum operational performance good but LME prices down (~9%) YoY and metal margin still depressed. - IES in line with ex

  6. Slide 6: Zinc Business Performance

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Asier Zarraonandia Managing Director of Zinc Business 6

  7. Slide 7: Zinc Business Performance

    BEFESA Zinc Business Performance Volume in crude steel in line with expectations Operational Performance  EAF Throughput Highlights - 153.516 tons of crude steel dust treated in 3Q  Crude steel dust deliveries in line with 2016 (+1,6% vs 3Q 2015); 429.803 tons treated in expectations 9M 2016 (+0,1

  8. Slide 8: Zinc Prices & Hedging

    BEFESA Zinc Prices & Hedging Zinc prices during 3Q‘16 maintained the upward trend seen since begin of the year … 3Q average at ~€2.000 or +22% higher YoY 2H ‘16: 1H ‘17: Zinc Prices €2.038/t €1.896/t 2.200 € 2012: 2013: 1Q ‘14:  During the 3Q ‘16 LME zinc prices traded on average $410/t above €1.70

  9. Slide 9: Non-Zinc Business Performance

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 9

  10. Slide 10: Aluminum Performance

    BEFESA Aluminum Performance Good operational performance with stronger salt slag volumes as well as secondary alu volumes mainly driven by new plant in Germany … LME aluminum alloy prices and metal margin still depressed Operational Performance  Salt Slag/SPLs Recycled Highlights - 110.632 tons of

  11. Slide 11: 2016 Growth Strategy – Aluminum and IES

    BEFESA 2016 Growth Strategy – Aluminum and IES Bernburg ramp up completed. Acquisition and integration of Solarca into our IES segment completed. Aluminum Growth New Secondary Aluminum Plant in Bernburg (Germany)  3Q 2016 annualized run rate ~75% of targeted capacity … continue focus during the res

  12. Slide 12: Financials

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Wolf Lehmann Chief Financial Officer 12

  13. Slide 13: Zinc Financial Highlights

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Zinc Financial Highlights 13

  14. Slide 14: Crude Steel Financial Highlights

    BEFESA Crude Steel Financial Highlights Higher EBITDA YoY in our crude steel segment mainly due to recovering zinc prices and higher WOX volumes sold Crude Steel Revenues (€m) Revenues Highlights  YoY 3Q’16 vs. ‘15 the revenues increased by €13,5 151,2 154,4 million or +28,9% mainly driven by: - in

  15. Slide 15: Stainless Steel Financial Highlights

    BEFESA Stainless Steel Financial Highlights Good operational performance with stronger stainless steel volumes … LME nickel prices and margin in the sale of alloys still depressed Stainless Revenues (€m) Revenues Highlights  The stainless steel segment revenues increased 33,6 31,4 by +25% vs 3Q’15

  16. Slide 16: Consolidated Zinc Financial Highlights

    BEFESA Consolidated Zinc Financial Highlights YoY increase in revenues and EBITDA in the zinc business unit driven by recovering LME zinc prices to maximum levels reached in 2015 Zinc Revenues (€m) 195,1 199,8 73,6 58,0 3Q '15 vs '16 9M '15 vs '16 Zinc EBITDA (€m) 31% 41% 35% 34% 67,8 67,3 30,0 18,1

  17. Slide 17: Zinc Cash Flow & Liquidity

    BEFESA Zinc Cash Flow & Liquidity 9M 2016 with positive cash flow driven by operating activities  Operating activities: During 9M 2016 the net cash flows generated by operating activities amounted to €34,2 million (a €3m decrease vs 9M 2015), driven by the EBITDA improvement but offset by the incre

  18. Slide 18: Aluminum Financial Highlights

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Aluminum Financial Highlights 18

  19. Slide 19: Aluminum Financial Highlights

    BEFESA Aluminum Financial Highlights Good operational performance of the Aluminum business unit … LME aluminum alloy prices and metal margins still depressed Aluminum Revenues (€m) Revenues Highlights 278,1 242,9  During 3Q 2016 revenues decreased 15% (compared to 3Q 2015) mainly driven by lower al

  20. Slide 20: IES Financial Highlights

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook IES Financial Highlights 20

  21. Slide 21: IES Financial Highlights

    BEFESA IES Financial Highlights Normalized for the Sulfur divestiture IES down by approx. €3,4 million EBITDA vs 3Q‘15 including the acquisition and integration of Solarca IES Revenues (€m) Revenue Highlights 98,7  During 3Q 2016 revenues decreased by ~15% or €4,2m 76,5 (compared to 3Q 2015) to €25

  22. Slide 22: Consolidated Non-Zinc Financial Highlights

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Consolidated Non-Zinc Financial Highlights 22

  23. Slide 23: Consolidated Non-Zinc Financial Highlights

    BEFESA Consolidated Non-Zinc Financial Highlights Revenues and EBITDA in the non-zinc business mainly impacted by weak LME alu alloy prices & margins, as well as slow industry environment in the IES business Non-Zinc Revenues (€m) 376,2 318,3 354,8 ex Sulfur 115,1 97,5 107,8 ex Sulfur 3Q '15 vs '16

  24. Slide 24: Consolidated Financial Highlights

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Consolidated Financial Highlights 24

  25. Slide 25: Consolidated Financial Highlights

    BEFESA Consolidated Financial Highlights 3Q’16 revenues slightly down 1% but EBITDA up 5% vs. 3Q’15 … QoQ EBITDA improved from 1Q at €25m, 2Q at €35m to 3Q’16 at €37m Revenues (€m) Highlights 571,3 M€ 518,1 M€  3Q 2016 consolidated revenues at €171 18% 173,1 M€ 171,1 M€ 15% million, -1% or €2 milli

  26. Slide 26: Consolidated P&L

    BEFESA Consolidated P&L 3Q’16 EBITDA up 5% or €2 million vs. 3Q’15 … Net income up 90% or €1,8 million. Consolidated P&L (‘000 euros) BEFESA Profit & Loss Statement ('000 euros) 3Q 2015 3Q 2016 Change 9M 2015 9M 2016 Change Revenue 173.128 171.139 (1.989) 571.277 518.076 (53.201) EBITDA 34.824 36.70

  27. Slide 27: Consolidated Cash Flow Statement

    BEFESA Consolidated Cash Flow Statement  Operating activities: During 9M 2016 the net cash flows generated by operating activities amounted to €36,7 million (a €18,7 million decrease compared to 9M 2015), mainly due to lower metal LME prices and higher taxes paid compared to the first nine months o

  28. Slide 28: Debt Structure & Net Debt Position – Sep YTD 2016

    BEFESA Debt Structure & Net Debt Position – Sep YTD 2016 Solid and stable financing position at 3 levels (Zinc, Non-Zinc and Corporate) with total leverage at x4,5 Net Debt / Total Net LTM Sep 2016 EBITDA PIK Note 166 M€ Debt(1) 565 M€ x4,5(2) Befesa Medio Ambiente Ring fence structure Zinc Non Zinc

  29. Slide 29: Outlook

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Javier Molina Chief Executive Officer 29

  30. Slide 30: 2016 Business Focus

    BEFESA 2016 Business Focus Main priorities for 2016 focused on parallel path of profitable growth for the next years and operational excellence Main priorities for 2016 on track • Sustain and improve our Health & Safety performance across the entire organization • Preserve the cash position by manag

  31. Slide 31: Questions

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook Questions 31

  32. Slide 32: Appendix

    BEFESA Business Zinc Business Non-Zinc Business Business Introduction Financials Q&A Appendix Highlights Performance Performance Outlook 32

  33. Slide 33: Zinc Detailed Operational Data

    BEFESA Zinc Detailed Operational Data 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 3Q 2016 vs 2015 9M 2016 vs 2015 Change Change 2015 2015 2015 2015 2016 2016 2016 2016 (tons) (%) (tons) (%) Crude steel dust recycling Installed capacity1 tons 670.300 670.300 670.300 670.300 780.300 780.300 780.300 780.300 110.000 16,4%

  34. Slide 34: Aluminum Detailed Operational Data

    BEFESA Aluminum Detailed Operational Data 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 3Q 2016 vs 2015 9M 2016 vs 2015 Change Change 2015 2015 2015 2015 2016 2016 2016 2016 (tons) (%) (tons) (%) Salt slags and SPLs recycling Installed capacity6 tons 609.000 609.000 609.000 609.000 609.000 609.000 609.000 609.000 0 0,0%

  35. Slide 35: Consolidated P&L

    BEFESA Consolidated P&L BEFESA Profit & Loss Statement ('000 euros) 3Q 2015 3Q 2016 Change 9M 2015 9M 2016 Change From continuing operations: Revenue 173.128 171.139 (1.989) 571.277 518.076 (53.201) +/- Changes in inventories of finished goods and work in progress (1.053) 1.859 2.912 (1.611) (1.052)

  36. Slide 36: Consolidated Balance Sheet

    BEFESA Consolidated Balance Sheet BEFESA Balance Sheet ('000 euros) Assets 30.09.16 31.12.15 Equity and liabilities 30.09.16 31.12.15 Equity: Non-current assets Attibutable to owners of the parent - Intangible assets Share capital 13 13 Goodwill 379.990 379.990 Reserve for valuation adjustments defe

  37. Slide 37: Consolidated Cash Flow Statement

    BEFESA Consolidated Cash Flow Statement BEFESA Cash Flow Statement ('000) 3Q 2015 3Q 2016 Change 9M 2015 9M 2016 Change Cash flows from operating activities: Profit (loss) for the period before tax 4.880 8.226 3.346 35.053 23.709 (11.344) Adjustments due to: Depreciation and amortisation charge 14.1

  38. Slide 38: Zinc Detailed Balance Sheet

    BEFESA Zinc Detailed Balance Sheet BEFESA ZINC Balance Sheet ('000 Euros) Assets 30.09.2016 31.12.2015 Equity and liabilities 30.09.2016 31.12.2015 Non-current assets: Equity: Intangible assets: Of the Parent: Goodwill 278.357 278.357 Share capital 25.010 25.010 Other intangible assets 3.011 4.038 U

  39. Slide 39: Zinc Detailed P&L

    BEFESA Zinc Detailed P&L BEFESA ZINC Profit & Loss Statement ('000 euros) 3Q 2015 3Q 2016 Change 9M 2015 9M 2016 Change Revenue 58.021 73.639 15.618 195.127 199.793 4.666 Cost of sales (37.133) (39.234) (2.101) (114.121) (117.838) (3.717) Other operating income 2.703 1.212 (1.491) 3.918 2.525 (1.393

  40. Slide 40: Zinc Detailed Cash Flow

    BEFESA Zinc Detailed Cash Flow BEFESA ZINC Cash Flow Statement ('000 euros) 3Q 2015 3Q 2016 Change 9M 2015 9M 2016 Change Cash flows from operating activities Profit for the period before tax 6.231 18.028 11.797 30.810 32.807 1.997 Adjustments due to: Amortization / depreciation 4.580 4.601 21 13.02

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